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Schumpeter understood the role of innovation in the economic change. He coined the term creative destruction to emphasize the importance of creating something new and introducing it to society. Creative destruction, he stated, occurs when improved methods to create the service rendered have appeared on the market, and people of this society prefer these new methods to deliver the service over the old methods. Therefore, it is only a consequence of people in society turning to the improved method.

The innovation introduced by an entrepreneur may never be monopolized, this will only lead to profit equality among competitors because in proportion as the machine came into general use, the price of commodity produced, would, from the effects of competition, sink to it’s cost of production as a consequence, profitability will again tend to equality. This reality makes the society reach fora higher level of wealth as time advances. thus, will eventually destroy capitalism from within according to Mr. Joseph Schumpeter.

This whole creative destruction got me thinking.. Economists have a way of predicting things about the society. Schumpeter’s analysis of the whole things left me at awe for I have witnessed somewhat a creative destruction around me. The ‘milk tea craze’ 2 years ago suddenly popped out of nowhere. You may only see milk tea occasionally for it was just brought here by some entrepreneurs who had tasted it probably from other countries. But after a few months or so, milk tea boomed everywhere. There is even one now inside San Beda! This goes to show that an innovation introduced in a society cannot be monopolized for after some time, it will eventually be imitated and will become a ‘general good’ thus having an effect called ‘profit equality’ among competitors urging intellectuals as what Schumpeter calls them or entrepreneurs to innovate again and again that may give the society a chance to acquire for a higher wealth.

Thanks to Schumpeter, I can now understand a part of economics without its dazzling graphs and numbers. The job of creative destruction into destroying something so creatively that more people in society would be happy to destroy rather than think about the people at stake. It is because we all get something positive out of the concept of destroying because through the years, it has created the world we have today. All its technological wonders and innovated products (some are not very useful though) are the byproduct of it.

Now, operations management might have a say in this because the operations that are being used today IS also a byproduct of the so-called “creative destruction”. operations managers must always have an endless research to achieve a more efficient and more effective way of doing things, or “innovative way” as what economists coined it. As what I have learned from Taylor ‘‘just because something has always been done that way, don’t assume that it’s the best way.”